Stocks finish higher after seesaw session
NEW YORK » Wall Street finished a back-and-forth session higher yesterday as investors overcame some of their nervousness about the credit markets and uneven earnings and found solace in the technology sector.
Several companies including drug maker Merck & Co. reported decent third-quarter results, but investors were unhappy with rival drug maker Schering Plough Corp.'s results. They were also mindful of the downbeat profit outlooks from several blue chip companies last week.
Still, after an early slide, the market seemed to grow optimistic about Apple Inc.'s earnings, which did top Wall Street's expectations when the company reported after the closing bell. The eager anticipation of the report sent tech stocks higher, and by early afternoon, other stocks were tagging along.
Disappointing earnings and Standard & Poor's downgrade of another series of mortgage-backed securities sent stocks plunging Friday, taking the Dow Jones industrials down 366 points.
"It is not unusual for a big down day to be followed by an up day. I think the bargain hunters are out there," said Brian Gendreau, investment strategist for ING Investment Management. "It seems there's fairly strong demand out there, despite all the bloodletting on Friday."
He noted that while some big-name companies' results have disappointed Wall Street, about two-thirds of earnings so far have beat estimates and outlooks remain upbeat for the technology and health care sectors.
The Dow rose 44.95, or 0.33 percent, to 13,566.97, after falling more than 100 points early in the session.
Broader stock indicators finished higher, with tech stocks leading. The S&P 500 index rose 5.70, or 0.38 percent, to 1,506.33, and the technology-dominated Nasdaq composite index rose 28.77, or 1.06 percent, to 2,753.93.
The Russell 2000 index of smaller companies climbed 11.29, or 1.41 percent, to 810.08.
Advancing issues outnumbered decliners by about 9 to 7 on the New York Stock Exchange, where consolidated volume came to 3.4 billion shares, compared with a heavy 4.05 billion shares traded Friday.
Treasury bonds were little changed after Friday's steep gains. The yield on the 10-year note, which moves inversely to its price, was flat at 4.40 percent.
Crude oil futures settled down $1.04 to $87.56 a barrel on the New York Mercantile Exchange.
Gold also declined, while the dollar rebounded sharply against several major currencies.
On Friday -- the 20-year anniversary of the Black Monday crash -- investors sold off stocks and bought up safer assets like U.S. Treasury bonds as the prospect of a thaw in the frozen credit markets grew dimmer.
Overseas markets were unsettled, responding to Friday's drop on Wall Street.
In Asian trading, Japan's Nikkei stock average declined 2.24 percent, while Hong Kong's Hang Seng index dropped 3.7 percent.
In later European trading, Britain's FTSE 100 fell 1.05 percent, Germany's DAX index fell 1.13 percent, and France's CAC-40 fell 1.38 percent.